I am so fed up right now. I couldn't target my iPhone in Xcode as it couldn't find a Developer Disk Image so I tried updating Xcode. The App Store told me I don't have Xcode installed so I deleted my Xcode installation and installed it again via App Store. Still, no Developer Disk Image. I then updated my OS from 10.10 to 10.11.5, hoping that that was the solution: Developer Disk Image message persisted. I am not running any virtual box and AFAIK this is the only installation of Xcode that I have, I have installed it right from the App Store.
Then I checked what version of Xcode I have and it says 7.2.1 whereas the App Store says I just installed 7.3.1.
What is going on? The last 12 months of using Apple products were nothing but disappointments.